Revenue by product line was 30% Design2Silicon, 30% Scalable Verification, 20% Integrated Systems and 15% New and Emerging. The top ten customers accounted for 50% of total revenue.
Net Income for the quarter was $35.7 million, an increase of 15% from the $30.1 million in the year ago quarter and a significant turnaround from the net loss of $9.1 million in the prior quarter.
Gregory K. Hinckley, president of Mentor Graphics, said, “The company executed well in fiscal 2008, and we are positioned to continue to outperform the market in fiscal 2009. Additionally, we have tightened our focus on cost controls, and have taken a number of actions, including shuttering our IP division, to provide a more competitive cost basis going forward.”
On February 20, 2008 Synopsys, Inc. reported financial results for the first quarter of Fiscal 2008, the period ended January 31, 2008. Total revenue for the quarter was $315 million, an increase of 5% from the $300 million in the same quarter a year earlier and flat with respect to the prior quarter. Time-based license revenue at $268 million accounted for 85% of total revenue. This was an increase of 6.5% year-over-year and an increase of 3.8% sequentially. Maintenance and service revenue was $35 million, accounting for 11% of total revenue. This was flat year-over-year, and down almost 5% sequentially. Upfront license revenue at $12.5 million accounted for 4% of total revenue. This was down 7.3% year-over-year, and down almost 39% sequentially. North American revenue accounted for 52% of total revenue, European revenue 16%, Japanese revenue 17% and Pac Rim revenue 5%. North American revenue was up 6.6% year-over-year, but down 1.2% with respect to prior quarter. European revenue was up about 2.5% year-over-year and sequentially. Revenue from Japan was up almost 4% year-over-year and almost 8% sequentially. AP revenue was up 4.5% year-over-year, but down 5.5% sequentially.
On February 5, 2008 Synplicity Inc. reported financial results for the fourth quarter and the year, the periods ended December 31, 2007. Total revenue for the quarter was $20 million, an increase of 22% from the $16.4 million in the fourth quarter of 2006 and an increase of 3.3% from the $19.4 million in the third quarter of 2007. License revenue was $9 million, or 45% of total revenue. This was an increase of 68% year-over-year and an increase of over 16% sequentially. Maintenance revenue was $7.4 million an increase of nearly 8% year-over-year and an increase of 4.7% sequentially. Bundled service revenue was $3.7 million or 18% of total revenue. This was a decrease of 12% year-over-year and a decrease of 20% sequentially.
Net income for the quarter was $10.3 million, an increase of 549% from the $1.6 million in the year ago quarter and a 613% increase from the $1.45 million in the prior quarter. This quarter's GAAP net income included a benefit of $9.4 million related to the recognition of deferred tax assets in accordance with the accounting rules specified in SFAS 109.
Gary Meyers, Synplicity president and chief executive officer, said, “I am pleased to report outstanding bookings and revenue growth in each of our three product categories in the fourth quarter of 2007 compared to a year ago. Our ASIC verification solution, Confirma, which integrates our software with the HAPS hardware acquired through our acquisition of Hardi in June 2007, presents us with the largest market opportunity in our history. In addition, our FPGA synthesis line continues to gain share and revenue from our ESL products is growing at nearly a 50% rate, with a more than doubling of bookings in 2007. We are in the process of introducing enhancements across our product line, providing us with the prospects for another solid year in 2008.”
EDA Vendor Stock Performance
The covered EDA vendors did not do so well in this category. As shown in Tables 8 and 9 and Figure 3 below, the combined stock prices for the EDA vendors declined almost 8% in absolute dollars compared to the same period last year. This was an average fall in price of 8.2%. On a year-over-year basis only LogicVision had an increase in stock price, at almost 37%. Mentor and Altium suffered the largest percentage decline at minus 40% and minus 31%, respectively. On a sequential basis the combined stock prices fell almost 17% in absolute terms and on average fell 15%. All the firms had stock price decreases compared to the prior quarter. Mentor, Cadence and Ansoft endured declines over 20%. Synopsys tolerated the smallest decline.
The popular stock indexes rose an average of 6.6% compared to the fourth quarter of 2006, but fell 3.4% with respect to the last quarter.
The value of EDA Vendors' equity may well suffer again in 2008. As readers know, the EDA software industry is dependent heavily on robust manufacturing activity. On March 01, 2008, The Chicago Tribune reported that the Chicago purchasing managers index, a closely followed measure of manufacturing activity, dropped in February to its lowest reading since the recession year of 2001. Instead of dropping from January's lackluster reading of 51.5 to 49.5 in February, as economists had predicted, the index unexpectedly plunged seven full points, to 44.5, its lowest level since December 2001. Economist Ryan Sweet of Moody's Economy.com noted that "a below-50 level in orders and uncertainty about the economic outlook have led manufacturers to hit the brakes." He added that this "report underscores the fact that with consumers turning wary and the impact from the collapse of the housing sector still spreading, the manufacturing sector is clearly struggling."
As we sink deeper into W's second recession, here is another economic tidbit. Capping a unremitting rise in the last seven years, oil prices hit a record high during the day on March 3, 2008, according to a report March 4, 2008 in the New York Times. March 3rd's highest trading price, $103.95 a barrel on the New York Mercantile Exchange, broke the record set in April 1980 during the so-called second oil shock. That price, $39.50 a barrel, equals $103.76 today, when adjusted for inflation. Oil prices hit even higher records later in the first week of March 2008, and traded above $108 a barrel on March 10, 2008. The trend is expected to continue, especially after FED Chairman Ben Bernanke signaled in late February 2008 that he was ready to cut interest rates still further to try to bolster sagging US economic growth, despite relentlessly rising consumer prices.
Sales of cars and trucks in the United States fell 10% in February 2008. Americans were paying an average of $3.165 for a gallon of regular gas as of March 3, 2008, 69.8 cents more than a year ago, according to the AAA. In CA it's more like $3.60 now. Analysts say that a US average for regular of $4 a gallon is possible within months. By the way, lest we forget, oil was about $20 a barrel when W took office in 2001.
More bad news was released by the US Labor Department on Friday March 7, 2008. Employers slashed jobs by 63,000 in February 2008, the most in five years . The Labor Department's report also showed that hundreds of thousands of people - discouraged by their job prospects - left the civilian labor force. Job losses were widespread, with hefty cuts coming from construction, manufacturing, retailing, financial services and a variety of professional and business services. February manufacturing payrolls alone fell by 52,000, the most in five years. Those losses swamped job gains elsewhere in non-value added sectors like leisure and hospitality and the government. The same Labor Report also showed that the job losses suffered in December 2007 and January 2008 were far worse than the government first reported: payrolls for December and January were revised down by 46,000.